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China Will Pay For Currency Move

By

Alen Mattich

June 21, 2010 8:35 a.m. ET

China's decision to relax its dollar peg, to where we might see a modest appreciation of the yuan over the coming months, has been cheered by the markets.

Unfortunately, China's imbalances are so great that this sort of revaluation is unlikely to be any more useful than handing out bailing buckets would have been on the Titanic. This isn't to say the Chinese economy is a sinking ship, yet. But the iceberg is looming and these...